The news comes from the Rheinische Post, a local German newspaper that cited people close to the decision, as noted by Reuters on Sunday. Tesla could not be immediately reached for comment on the report. As for how far along things are, the paper said first inspections of a possible location have already taken place.

Twice, Tesla CEO Elon Musk has said Germany makes the most sense for a Gigafactory. This past April he noted the company was "considering" a factory in the country, and last year, he said the German and French border was a top choice.

News of the LG Chem supplier relationship also comes as China plans to restart tariffs on US car imports to the country. US-made cars will cost at least 25% more with the added tariffs. Tesla is one of a few automakers that stand to lose the most, especially since the majority of new Teslas are assembled in California.

Both China and the European Union are likely on Tesla's radar, since both stand to pass increasingly strict emissions regulations. Electric car adoption is likely to occur quicker in both areas than it is in North America.